>The problem with getting specific is that it ties you in to a specific solution.
Agreed -- would Google have the same incentive to roll out Google Fiber if they could just use (slower) existing coax/cable lines as a middleman? It could limit innovation from that perspective, although it depends if a company like Google has alternative reasons for rolling out their own last-mile fiber (not just data collection en masse).
> And after rolling out, Google would then be required to let anyone else use the last mile they built.
Either way Google would be getting paid for the cost of providing that last-mile service so it'd really come down to a question of whether someone could profitably outcompete them on either bandwidth pricing or other service value-adds.
I rather doubt that prospect would keep anyone at Google up at night – but it would cause plenty of heartburn in the Comcast/Verizon/AT&T etc. executive suites.
> Either way Google would be getting paid for the cost of providing that last-mile service so it'd really come down to a question of whether someone could profitably outcompete them on either bandwidth pricing or other service value-adds.
When something involves capital investments of billions of dollars, companies don't just want to eke out a small profit. They want enough profit to justify putting the money in that industry as opposed to some other one. If you can make 30% returns over here in social networking, why spend billions of dollars digging holes in the ground for 5% returns?
> I rather doubt that prospect would keep anyone at Google up at night – but it would cause plenty of heartburn in the Comcast/Verizon/AT&T etc. executive suites.
Sure, but only because Google makes 98% of it's money in a very high margin advertising business. Meanwhile, Comcast/Verizon/AT&T actually have to placate their shareholders with the money they make building infrastructure.
> If you can make 30% returns over here in social networking, why spend billions of dollars digging holes in the ground for 5% returns?
This point is meaningless without absolute values for comparison: 30% of small is less than 5% of large.
The other point is the one that Google states every time they do something network related: they're an internet company and they benefit from more people and more activity. If US broadband stagnates, that means things like cloud storage, video, etc. are not going to advance significantly beyond their current levels – and if network neutrality isn't maintained, anyone who doesn't own a network is going to be frozen out. That gives Google a strong incentive to invest in the capacity both so they can expand their network offerings and to provide a clear, obvious example of how much better service can be than what the rent-seeking monopolists choose to provide.
> Sure, but only because Google makes 98% of it's money in a very high margin advertising business. Meanwhile, Comcast/Verizon/AT&T actually have to placate their shareholders with the money they make building infrastructure.
All of those companies are making far more money than they spend on their infrastructure. They're trying to expand into other areas to make more but they're not doing it because they're going broke charging far in excess of the operating costs.
> That gives Google a strong incentive to invest in the capacity both so they can expand their network offerings and to provide a clear, obvious example of how much better service can be than what the rent-seeking monopolists choose to provide.
It gives Google a strong incentive to invest, but what about companies that just build internet infrastructure?
> All of those companies are making far more money than they spend on their infrastructure.
Their profit margins are much lower than Google's.
> They're trying to expand into other areas to make more but they're not doing it because they're going broke charging far in excess of the operating costs.
The irony of your position is that you fault Comcast, etc, for branching out in order to make more money from other areas, but justify regulation that would make building infrastructure minimally profitable on the basis that companies like Google can still make a bunch of money using that infrastructure to push advertising.
You can't have your cake and eat it too. If you make building infrastructure less profitable, companies will invest less in that industry, and the ones that continue to do so will do it with the intent of peddling some other product on top.
> The irony of your position is that you fault Comcast, etc, for branching out in order to make more money from other areas, but justify regulation that would make building infrastructure minimally profitable
You should read my comment again because you're arguing against a claim I didn't make. I don't fault them for branching out but merely noted that they weren't doing so out of financial desperation — the network is hardly a loss-leader.
If you can make 30% returns over here in social networking, why spend billions of dollars digging holes in the ground for 5% returns?
Because a market with 30% returns is going to attract a lot more competition than one with 5%. Look at Jeff Bezos's philosophy. He's deliberately attacked a very well established, low-margin business and he's made Amazon extremely successful at it.
